Siemens 2012 Annual Report Download - page 274

1 A. To our Shareholders 49 C. Combined Management Report 21 B. Corporate Governance
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  Provisions
In fiscal  and , item Other changes contains reclassifi-
cations to line item Liabilities associated with assets classified
as held for disposal including the disposal of those entities of
€ million and € million, respectively.
Except for asset retirement obligations, the majority of the
Company ’s provisions are generally expected to result in cash
outflows during the next one to  years.
Warranties – mainly relate to products sold.
Order related losses and risks – are provided for anticipated
losses and risks on uncompleted construction, sales and leas-
ing contracts.
In fiscal , the Power Transmission Division of the Energy
Sector incurred project charges primarily related to technically
complex grid connections to offshore wind-farms in Germany.
These charges were due to project delays resulting from a com-
plex regulatory environment and the projects’ complex marine
environment, which required revised estimates of resources
and personnel. This led to €() million pretax effects on the
income statement in fiscal , which are mainly recorded as
provisions for order related losses and risks.
In fiscal , Siemens reevaluated the commercial feasibility
of particle therapy for general patient treatment and began
shifting its focus of certain particle therapy projects primarily
to research. In accordance with project accounting rules,
Siemens took project charges and reduced third-quarter reve-
nue in Imaging & Therapy Systems of the Healthcare Sector by
the amount of revenue recognized from the projects in prior
periods and set up provisions. Total pretax effects on the fiscal
 Consolidated Statement of Income relating to the shifted
focus in the third quarter of fiscal  is € million includ-
ing provisions for order related losses and risks.
Warranties Order
related losses
and risks
Asset
retirement
obligations
Other Total
(in millions of €)
Balance as of October ,  3,506 2,017 1,130 2,169 8,822
Additions 1,446 1,123 1 562 3,132
Usage (738) (701) (9) (359) (1,806)
Reversals (847) (418) (21) (455) (1,741)
Translation differences 48 14 3 14 79
Accretion expense and effect of changes in discount rates 1 13 172 8 195
Other changes (12) (10) 5 (6) (22)
Balance as of September ,  3,405 2,038 1,282 1,933 8,658
Thereof non-current 1,146 733 1,261 768 3,908
Warranties Order
related losses
and risks
Asset
retirement
obligations
Other Total
(in millions of €)
Balance as of October ,  3,591 2,017 1,053 1,809 8,470
Additions 1,632 1,094 7 1,157 3,890
Usage (835) (628) (9) (410) (1,882)
Reversals (845) (384) (11) (318) (1,558)
Translation differences 3 (13) – (5) (15)
Accretion expense and effect of changes in discount rates 2 10 90 3 105
Other changes (42) (79) – (67) (188)
Balance as of September ,  3,506 2,017 1,130 2,169 8,822
Thereof non-current 1,091 595 1,111 857 3,654